Republican Leadership Postpones Tax Relief For Service Men & Women To Protect GOP Special Interest Provisions

Rangel: "Republican leaders have put a few members’ pet provisions before the financial well-being of our troops."

WASHINGTON - The House Republican Leadership today cancelled consideration of H.R. 878, a bill providing tax relief targeted to men and women in the armed services, because they lacked the votes to prevent Democrats from stripping several unrelated special interest tax breaks from the bill. At the invitation of Ways and Means Committee Chairman Bill Thomas (R-Calif.) and over the protests of Committee Democrats, several Committee Republicans attached completely unrelated tax provisions to the bill to provide tax relief to men and women in the uniformed services serving abroad.

Last week, Ways and Means Committee Ranking Democrat Charles B. Rangel (D-N.Y.) warned the Committee that such extraneous amendments could delay tax relief to service men and women. Today, House Republican leaders did just that - postponing action on the bill rather than dropping the special interest provisions.

"The tax relief for military men and women would be passed right now had the Republican leaders not insisted on including pet provisions. I do not care what the arguments are, tax breaks for fishing tackle box makers, bow and arrow sellers and foreign horse race gamblers are never more important than getting this tax relief to our troops as soon as possible," said Rep. Rangel.

"The Republicans have been wrapping the flag around every tax cut for the wealthy they can find. Today they showed their true stripes. When we are talking about the young men and women who already are making more than their share of human and financial sacrifices, it is shameful to play these political games," said Rep. Rangel.

Among the unrelated amendments attached to the bill by Republicans:

• A special tax rate on fuel that is a blend of diesel fuel and water benefitting the few companies that manufacture such fuel, sponsored by Rob Portman (R-Ohio)

• A tax break to benefit landowners who sell timber from their land, sponsored by Rep. Mac Collins (R-Ga.)

• An extension of the time allowed for ranchers to utilize a tax break for the weather-related sale of livestock, sponsored by Rep. Scott McInnis (R-Colo.)

• A tax break for certain bows and changes in tax rules to help domestic arrow producers, sponsored by Rep. Paul Ryan (R-Wisc.)

• A tax break for foreigners who place bets outside the U.S. on U.S. horse races, sponsored by Rep. Jim McCrery (R-La.)

• A temporary ban on allowing corporations to avoid U.S. tax by setting up sham HQs in foreign countries. The amendment grandfathers those companies that expatriated in the past, including those that left since September 11th (e.g. Ingersoll-Rand of New Jersey, Noble of Sugarland, Texas, Nabors of Houston, and Cooper Industries also of Houston). This amendment was offered by Rep. McInnis, Rep. Amo Houghton (R-N.Y.) and Rep. Nancy Johnson (R-Conn.)

The Republican Leadership postponed consideration of the bill when it became clear an alternative offered by Mr. Rangel might pass. That alternative would have stripped all of the unrelated tax provisions and included $661 million more tax relief over ten years for National Guard and Reserve members who have to travel more than 100 miles from home. It was identical to a bill that passed the Senate Finance Committee with full bipartisan support.

"Republican leaders have put a few members’ pet provisions before the financial well-being of our troops," said Rep. Rangel, a decorated Korean War combat veteran. "While the Majority Leader says the bill needs to ‘ripen a little bit’ and gives no indication that he is willing to clean up this bill, our men and women are any day now about to go to war."

Democrats also could have offered narrow tax provisions, but (contrary to Tom DeLay’s assertion) declined to add any unrelated provisions. (The only Democratic amendment would have made active members of the U.S. Peace Corps eligible for one of the tax benefits as those in the military.)

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